MaryK4
Expert Alumni

Get your taxes done using TurboTax

Normally, you would NOT report the sales tax collected on items as income but you are correct that the 1099-K reporting makes you susceptible to audit for underreporting.  Because of this, I would include the amount reported on the 1099-K and then add an expenses for the sales taxes paid on the Schedule C.  If you received the December sales tax in 2024, you would report the income, but then deduct the expense in January if you are using Cash method.  

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